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tv   Your Business  MSNBC  March 6, 2011 7:30am-8:00am EST

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small businesses taking a hit due to rising gas prices. how's the creators of an indoor beach volleyball facility got players to come in from the cold? serving up those stories coming up next on "your business." small businesses are
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revitalizing the which. hi there, everyone. i'm j.j. welcome to "your business" where we give you tips and advice to help your business grow. small businesses were starting to feel optimistic about the economy but now they are voicing concerns about where things are heading. rising gas prices are taking their toll on businesses as owners see their shipping and raw material costs increase. at the same time, the entrepreneurs are trying to avoid raising their own prices which could scare off customers. while energy costs skyrocket housing prices around the country continue to nose dive. new home sales down significantly in january. and then there's the lingering problem of high unemployment.
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not to mention state and local government budget and debt problem which is may lead to massive layoffs. so how are small businesses holding up? todd mccracken, president of the national small business association. chad is the president of pitch field ananal lit -- analytics, cameron johnson, entrepreneur and author. great to see all of you guys. todd, i want to ask you first -- let's talk about p gas prices now. from where you sit, are you telling small businesses you know what, plan for the worst, start thinking of ways to hedge this? >> well, i think the key thing to watch, you know, foreign policy -- i'm no foreign policy expert. the key thing is saudi arabia. and -- the next couple of weeks whether -- anything develops there that could be dangerous is a real danger sign. gas prices have gone up.
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we have seen these spikes before. they are definitely a problem, as you describe for small companies. i haven't been telling people, though, it is time to really plan for the very worst. we will see what the next few weeks hold and -- if that's the case, you can see significant rises in gas prices if things develop that could last for a very long time. that would be very bad news for small business and the entire u.s. economy. >> chad, what do you see from your vantage point? is this something small businesses should be worried about? >> it is very difficult for small businesses to pass on those costs to the customers and i know the last time this happened a couple of years ago, inflation was the number one issue for almost all small businesses if you look at the surveys. that kind of, you know, we have seen both insurance costs and more recently poor sales and access to credit being the big iss issues. inflation is definitely smg small businesses are worried about to the extent if they can't pass this on to the consumeers. >> let's talk about someone who runs a business right now.
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cameron, you run a car dealership. it is going to affect anyone, it is going to affect you. are you feeling the pain yet? >> we see it firsthand in customers' buying decisions, not necessarily hurting us at the same time. i think small business owners that are coming in and may have opted for, you know, large suv or larger truck, they may go to something smaller. i think the real question is are gas prices going to stay here or is this just a spike and once everything calms down in the middle east, prices will come back to what we call normal. >> as a small business owner you have to deal with both scenarios. how do you do that? >> it is a matter of having the right inventory because we are used to having a ford dealership, used to having big trucks. now we have to give in. people are looking for 40 miles per gallon because people want to save money. it affects the small business owner. >> we talked in that intro about housing. you know, i read a great study about how -- we all heard about how small business owners had trouble getting loans. one of the reasons was because they couldn't borrow against
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their homes because their homes were worth so much >> the home is a piggy bank, if you will, for all forms of borrowing and investing. that's going to be gone for a little while. we need to just accept that at least the next few years. on the flip side this is a great opportunity for small business owners to get serious about forecasting. 3 again, you can't control energy on costs and those expenses. you can say okay, suppose gas prices were at this level, how would we function and organize our business? it is 20%. that way at least you can see how it is coming and depending on how the gas prices spike and if the prices go up you have plans for how you will react. >> todd, do you see a lot of people doing that exercise of saying okay, let me look towards the future and then say what would i do in this scenario, that scenario? >> i think that is a good point. i don't see people doing it enough. i think that there is -- room to do more of that. the thing that's difficult for a small business is typically they don't in any way control the
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markets they function in. and so they can see -- how they react to gas prices and the difficulty is -- trying to figure out how there are vent -- their vendors react. the gas prices, you know, obviously, we think about it in terms of car buying decisions and that sort of thing. the really huge impact on small -- broad base of small companies is that it affects consumer buying decisions. >> right. >> money in their pocket. they are not -- do different things. so it is hard for small business, though, to know just how much it might affect their demand. >> chad, wane to go back to that housing issue with you. what are you seeing on that front about how house sing going to affect small business? >> well, i know the national federation of administration business did a survey on access to credit. and they found that housing was a large reason -- one of the many reasons why small businesses were not getting access to credit. credit that they need because as was just mentioned, the homes are their piggy bank they often use for investing in their
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own -- own equipment and that kind of stuff. so they need -- they need their house to be able to be tap into that equity, et cetera, that's hurting their ability to get access to credit. i know that -- i'm working with a franchise association right now and one of the biggest challenges among franchisees is credit and ability to grow their business house sing a large part of that. >> we have just been saying problems with credit for so many years now that i look forward to the day when we don't have that conversation. i want to stay with you for one more second, chad about this idea of the problems going on with local governments. how big of an effect will that have on small businesses? >> well, i think to the extent that hurts the economy and in terms of hurting gross domestic product certainly have already seen where local and state budget cutbacks have hurt our gross domestic product and that certainly hurts our ability to grow this economy and get consumer spending again. having said that i think that your average employer for the most part just simply wants some -- some type of sanity in terms of government spending and
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trying to solve this deficit issue. and trying to do that smartly and wisely so we can get the economy moving again. and so we also when we are cutting spending we are smart enough to make sure that we are investing for the future as well. >> we were talking earlier today about how things are looking up for business. in your business and a lot of businesses that you are talking to. when you hear these things, gas prices are high, house sing going down, problems in local government, are you still optimistic? >> optimism is relative. what we went through the past two, three years the fact you are still standing and still operating, the truth is things are getting better but it is still going to be a very, very bumpy road. the best thing you can say is we are still here and operating and we need to be smart about continuing to do go what's your feeling? >> well, i agree. i think the small business owner feels in every week that the consumer does. when they go to the gas pump and remember that last week it was $40 to fill up and this week it is $48, next week it may be $55, that's less money they can put into the economy and that will
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hurt everybody. >> all of you, thank you so much for joining this conversation. i appreciate all of your insight. >> most of us would probably drive 30 minutes or maybe even an hour to take part in one of our favorite activities. but how does six or seven hours sound to you? is it worth it? well, it certainly is to some customers who are willing to go the distance just for the chance to spike a ball in the sand. they say that this indoor volleyball business is serving up more than just competition. >> you see people walking in from the parking lot with their backpack and beach chair. you swear that they are walking down to, you know, one of the local beaches. but they are not. they are coming here. >> while it may look like the start of another day at the beach, the truth is the shore is actually miles away. >> sandbox is an indoor beach sports facility here in new england. and we offer beach volleyball,
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dodge ball, beach tennis, all sorts of sports you can play indoors. >> we offer the sporing side of it. we also offer the aesthetic, the vibe of the beach. >> complete with sand, four volleyball courts, tiki bar, this mystic, connecticut, business, is the brand child of brendan. he and his partner are beach volleyball players who wanted to turn their passion into a year-round activity. >> it was, i guess, slightly a self i shall motive. i definitely wanted someplace to play beach volleyball and certainly was a good way to make a business out of it. >> a lot of it was the fact i could be involved in a sport i love and be sort of a bigger player and get involved in the higher scale. >> woolrich knew his idea may have traction. why? the sandbox is the only indoor beach volleyball facility in new england. it also helps that volleyball is a sport for anyone and everyone. >> it just seems to be something that everybody is able to do at some level. i allows you to be as competitive as you want or
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uncompetitive as you want. you can look at our demographic both in age and gender and it is a pretty diverse array. >> considering volleyball's wide appeal, wool rich needed to more than just grow his business with die-hard players. so he decided to create a community complete with tournaments. >> everybody wants to play in the sandbox no matter how old or young you are. sense of community, i'm trying to develop here is that everybody is welcomed. all levels of play and all ages, all genders, community is, you know, a vast array of people. you know, you want everybody represented here. >> building the community required a little strategy. first, woolrich needed to attract their base. the key was getting players who would make the track simply to play at the beach. >> volleyball players are very niche group in themselves. they will travel 3 one hatch, 4 hours to go somewhere if it is good play. they won't go half hour for something that's free and not that good. >> the pair turned to the web to
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reach out to potential customers. >> you can advertise on volleyball lists, on the internet facebook pages, social media. that type of stuff. and it slowly makes its way out and spiders and networks. suddenly people down in florida are hearing about this place called the sandbox or people in delaware and whatnot. >> the idea had done the trick. players are going the distance to check out the sandbox. barbara drove one hour from rhode island just to play. >> some friends talked about how this indoor sand that was going to be opening up and that was first we heard about it. the opportunity of having something over the winter was you ash awesome. >> while joseph and his friend drove six hours from new jersey for some face time in a tournament. >> we have friends by where we are. they knew about it. we looked it on facebook and found out about it. it is our first time here. >> unlike fellow volleyball players, samantha browning lives
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locally. >> it is cool. getting to know everyone. this was my first year playing beach volleyball. >> she and other mystic area residents praise the sandbox's community approach. even though the number of local customers is still lower than expected. >> volleyball is not just sport. volleyball is social as well. >> that's the most important thing. develop a community of the people that come in here. instead of treating them as a customer you treat them as a friend, some one that -- also your volleyball partner. >> number of people here today that i don't know but, you know, certainly i will -- try to talk to them before they leave today and see how they like it. >> woolrich also says his team brings players together of all skill levels that otherwise would be opponent. >> groups that play at this beach and never get on the court with them. they play at this beach. they don't like this beach. everybody comes here. >> the popularity of the sandbox during winter helped make money. the business face it is inevitable challenge with the weather warming up. >> we can't compete with the beach. i will be at the beach myself.
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>> both business owners say there are still plenty of reasons to come to their sand-filled facility. >> we have the only lighted courts in the area. there is the fact the sun does eventually go down. and we will be here still offering volleyball at 7:30, 8:00 at night. we can stay open until 10:00, mid night. >> if we have a tournament here and it rains we don't have to change the time. you can bank on coming here no matter what. >> with the addition of charity events, the sandbox is holding tight to its community ideal. they are doing everything they can to make their community grow. >> that's 99% of the problem from a small business owner. how do you get people in the door? now that they have gotten in the door i'm more than happy to judgment open the court with the most recreational beginner player. >> alfred and cameron are back with us. that's such a fun piece. a few years ago i did a story about mountain bike their opened an indoor mountain biking place.
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it is so fun but is the market big enough? would that be your biggest concern when opening something like this? >> that's the challenge. this facility, you want to keep that facility full all the time. you don't want any empty courts. i would explore things like starting youth leagues, go to the local schools to say you want to start school teams and create competitive sports with the school systems. you can do privilege at coaching. there are people that want to get serious about playing volleyball. if somebody can coach them and get better and go to the olympics, if you will. those are ways you can fill up the courts even when people are going to play volleyball. >> that's a good idea. guaranteed customers coming in. last weekend i went to a place in massachusetts it was huge. it was so much fun. a bouncy and all this stuff my kids love. i was just thinking what do you do during the week? i mean, you have -- paying rent on this enormous building. and it probably sits empty. i felt the same way about this maybe. you are talking about things but
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that's still would happen after school. what happens from 9:00 in the morning until 3:00? >> your expensed are fixed for mop p you have to get as many people in the door. birthday parties for young kids, whether that means -- sounds like they are doing a great job with the community aspect. i think that will be crucial. the first six months, people like it because it is their first time going. how are you going to get them to keep coming back and keep driving six hours? >> it is the tiki bar. >> tiki bar. >> create activities that volleyball is kind of -- the reason you came. bowling alleys and bowling leagues. they have nighttime bowling, glow in the dark bowling. glow in the dark volleyball. bring young adults and say hey, play volleyball from 11:00 to night until 2:00 in the morning, a big beach party at night. there are things you can do that does not necessariably the volleyball itself, creating a social atmosphere. like a starbucks tragedy, not about coffee, it is about going there and keeping that place.
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>> you will a bowling ael alley in brooklyn, it has a great restaurant and bands. it is fun. went there for fun actual there other day and it was great. that's what they did to make use of all the extra time. >> i can see a cool beach party theme. nice open bar. things like that. >> i mean, volleyball is such -- a cool and community sport. and i like what he said that, you know on the beach these people play at this beach and this beach. here we bring in everyone together. how do you create a community that doesn't scare other people off? right? have you sort of the cool volleyball players and know everyone and they are really good. am i as a beginner going to feel uncomfortable? >> during the day is when you bring in the youth. the nighttime is when the pros get off work. if you are going to go after 8:00 to play at night, you are probably going to be playing with really good players because they work during the day and most likely they are older. somehow you have to fill, you know, the beach, if you will, during the day.
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and in the biggest chang advantag advantage,too, when it is really cold in new england, during the day, kids don't have that many other places to go. even if it is from 3:00 to 8:00. >> yes. all right. thank you so much, you guys. who says you need to break the bank on costly search engine optimization services? you don't. here are five free tools courtesy of google offers a number of tools to analyze your site's performance and track search trends. diyseo's website grades on search criteria. seo searches simultaneous in google and yahoo. tolo helps covers your message boards. if you are looking to track down the one decision maker, buzz stream e-mail research tool provides search yearies that can help you pinpoint someone's
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e-mail address. still to come, today's elevator pitcher wants people to take control of their health and stay fit. i'm sam chernin, owner of sammy's fish box. i opened the first sammy's back in 1966. my employees are like family, and i want people that work for me to feel that they're sharing in my success. we purchase as much as we can on the american express open gold card so we can accumulate as many points as possible. i pass on these points to my employees to go on trips with their families. when my employees are happy, my customers are happy. how can the gold card help serve your business? booming is taking care of your business by taking care of your employees.
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♪ get physical ♪ physical >> indoor beach volleyball is one way to stay fit. not everybody does it. today's elevator pitch, happy product board out of his concern people aren't healthy and active enough. >> hello. my name is seth, chopper, ceo o switch to health. we have just recently launched, a website that rewards people for activity. there is an activity tracker that records physical activity. and after 60 minutes it provides a unique reward code. go to the website, enter the code, get points, get rewards. our business partners, our reward partners, provide access to great rewards to our user community, gaining a targeted audience and also acquiring customers. we've launched this consumer solution in 2010 and have users throughout the country and established distribution overseas. this coming spring, we're
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prepared to launch a solution for corporate wellness initiatives and we'll do so with some key national brands. we're seeking $2 million in financing to support sales and marketing, finance inventory -- >> seth, that is -- seth, i don't want to cut you off. is there anything else the $2 million will go towards? >> absolutely, to finance inventory, marketing and further web development. >> this is such a good idea. there's so much rewarding people for doing good, recycling and now fitness, which i clearly need these days, and probably a rot of people out there because entrepreneurs don't have a lot of extra time. let's see how the panel thought you did with the pitch. alfred, start with you. >> i think it's an excellent idea. there are a couple target markets, both people in need of getting fit, but i also see a market for people who are already into fitness and want to be rewarded for the work they already do in the gym. i think this is a great idea and has a lot of legs. >> thank you. >> cameron? >> i think companies are always looking for ways to cut health care expenses, so i think
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companies would be interested in this product and i think they would be willing to put the money behind it because it's cheaper to get our people in shape. so i'd be interested in talking to you more. >> that's such a neat idea. would you take another meeting? >> yes. >> i think so. >> well, seth, i met you at a panel a while ago. i'm so happy you came on. you were just in the beginnings of the company, so great to see that it's launched. good luck. and thank you so much for everything. if any of you out there have a product or service and you want feedback from our "elevator pitch" panel on your chances of getting interested investors, just send us an e-mail. our address is please include a short summary of what your company does, how much money you're trying to raise, and what you intend to do with that money. you never know, somebody out there watching this show might be interested in helping you. it's time now to answer some of your business questions. alfred and cameron are here to help us. we have an e-mail from lisa, who writes "how do i value a private company's brand for possible
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sale? a potential purchaser is interested in the brand but not the hard assets. does anyone have any insights as to how i should arrive at a fair price?" cameron, i'm going to start with you, since you've at least sold a few companies. >> what i would do is what were your company sell for, hard assets along with the brand? because you've got to be able to sell those hard assets to someone else and sell the brand itself, to at least make more money than by just selling the brand. because if you're going to somehow not come out the better by doing this, why wouldn't you sell the company as a whole? >> so, the idea is perhaps -- >> if you're going to break it off, the pieces have to be more than the pie together. >> piggybacking off of that, there are about half a dozen forms of evaluations. two you can look at is how much more do you charge for your product than a competitor's product that doesn't have the same brand recognition? you can build that into the valuation. you can also look at how much money you spent to establish the brand in terms of marketing and other monies that were spent, and then come up with how much that brand was worth to you.
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again, it's hard to really evaluate an intangible product, but it can be done. >> certainly good starting points. let's move on to a question about marketing to your customers. >> i'm trying to develop a marketing campaign to attract our target audiences, one being musical instrument dealers and the other, drummers and players. what is the best method for achieving that goal? is it, a, social media, b, e-mail blasts, c, print ad, or d, direct mail via snail mail? >> all right. a, b -- multiple choice here. it's tricky where he's at right now because he's marketing to two very distinct populations. >> well, this is kind of a trick question because it's not an either/or. probably the thing i would stay away from, at least in the beginning, is the print advertising, unless it's going to be very, very targeted to your audience. but if you're going to do an e-mail blast, you might as well have social media because they
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can get to your social media through e-mail and vice versa. so you want to do both. to the degree you can gather addresses, do snail mail as well. i would say social media and e-mail blasts first, then supported by snail mail to the degree you can get good addresses. >> right. it's expensive, though. compare the e-mail to the snail mail, direct -- >> with social media, e-mail -- social media is a no-brainer, because it really doesn't cost anything if you can put together a good strategy. then e-mail would be the second thing. then i would go to snail mail next. print would be last if you can really target it. >> i guess the question, though when he says social media, is how big is your list and how do you intend to grow that list? >> is he going to partner with affiliates where he's going to be giving them a percentage of the the sale to promote their products or business to his existing list? i look for what is the least amount i can spend that will get me the biggest return? and that's definitely not print ads for this type of business. when you've got no brand recognition, when you probably can't target it, as targeted as you need to be, it just does not make sense. you've got to do something online because it costs the
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least. >> okay. let's move on to the next one. this is a question about taking your business global. >> are there other resources available outside of the export-import bank or private sector for helping finance international trade transactions, emerging markets? >> any ideas? cameron, have you stepped into this world yet? >> i haven't done importing and exporting at this level, but one company that i work with that i'm familiar with, they actually produce the product in a foreign country, and that country helps finance selling the product back to america. so, you know, it's really something that we should look at doing here, you know, to try and put people back to work. but what this country will do is they'll actually help finance the company at a 0% interest loan to produce the product there and then ship it back to america. >> yeah, my answer's very similar to that. this is a case where the incentive to finance the trade may be in the other country. >> right. >> if you're not going to use our incentives, the import/export bank and other
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things it may be that the other countries where you're interested in doing business have an incentive they're trying to reach. >> so it makes perfect sense where do you go to even figure out who to talk to there? >> that's the challenge of international finance. >> right. >> you almost have to go country by country. you could start out with the federal government, obviously. they can provide resources. but you almost have to be on the ground in these countries to find out the best way to operate. >> or get a partner or consultant over there. >> that's ideal. >> okay, great. thank you so much for all this advice. it's very much appreciated. and if any of you out there have a question for our experts, all you have to do is go to our website. the address is there, just hit the "ask the show" link to submit a question for our panel. again, the website is or if you'd rather, you can e-mail us your questions and comments. the address is looking for a little inexpensive help this summer? if so, check out our website of
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the week. is a marketplace of more than 45,000 internships around the country. employers can register for free and then post any openings. you can also scan resumes to look for candidates in your area. and the site has tips on how to offer a rewarding internship program. to learn more about today's show, just click on our website. it's you'll find all of today's segments, plus web-exclusive content with more information to help your business grow. and don't forget to become a fan of the show on facebook. we look forward to getting your feedback. you can also follow us on twitter. it it's . next week, a business owner who has managed to mix two risky ventures, offering dog sled rides and running a restaurant. >> there's a symbiotic relationship between the two. it's kind of magical, if you will. >> find out how this entrepreneur managed to keep his business from going to the dogs
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for more than 40 years with a fairly unorthodox business plan. until then, i'm jj ramberg. and remember, we make "your business" our business. i grew up in the bronx. i just loved it here. i'm sam chernin. owner of sammy's fish box. my uncle owned a restaurant up on city island. and we started going to the restaurant in the summers. 8, 9, 10 years old. i knew immediately that this is what i like, never dreaming that i would own seven restaurants. i want people that work for me to feel that they're sharing in my success. so we purchase as much as we can on the american express open gold card. and we accumulate as many membership reward points as possible. and use those points to reward our employees. they get a trip with their family, and some wonderful memories. the average employee is with me over 20 years.


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